The Fed today begins their one-day meeting but the markets have priced in an unchanged verdict from the Bernanke-led FOMC at the 18:15 GMT release. However, many expect to gain further clues on the path of US inflation from the rhetoric used and as a result the potential for any rate moves into H2 could be unveiled.
EUR/USD has traded on a steady footing for the majority of the day with the Asian 1.3535/55 range only marginally extended by European position adjusting to 1.3530/60. Dealers now look for spot to trade a rough 1.3525/75 band ahead of this central bank event-risk with the broader 1.35/36 range said to give the price more directional clues. With the ECB also set to report on rates this week (Thursday 11:45 GMT) this range may prevail for now.
Should spot break below 1.3530/35 support in the short-run then 1.3515/20 will be eyed with stops reported below here before the 1.3500 level comes into view. Central bank and Sovereign names have been reported to be protecting this level with larger stops noted below. Elsewhere, option dealers note expiries at 1.3500 intraday (NY cut at 14:00 GMT) that should help fortify the downside.
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